Which of the Following Is Not a Misstatement of the Financial

question 50

Multiple Choice

Which of the following is not a misstatement of the financial statements?

• A) The client uses different inventory accounting methods for internal and external reporting.
• B) A departure from GAAP.
• C) The footnote for pensions is omitted.
• D) A clerk incorrectly based the allowance for doubtful accounts on 31% of sales as opposed to 13% of sales as determined by the controller.

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Definitions:

Major Business Function

Core activities essential for the operation and success of a business, such as marketing, production, and sales.

Outsourcing

The practice of hiring third parties to perform services, handle operations or provide goods that are either difficult to manage or are outside of a business's core competencies.

Benefits Administration

The process and system by which employee benefit programs are designed, implemented, and managed by an organization.

Information Technology Management

Refers to the process of overseeing all matters related to information technology operations and resources within an organization.